Gates, Ballmer get raises, but other execs earn more

Microsoft discloses multimillion-dollar advance deal with former president

Helen Jung, The Associated Press

Published 10:00 pm, Friday, September 20, 2002

Microsoft Corp.'s top two executives received 13 percent raises in the past year, with Chairman Bill Gates and Chief Executive Steve Ballmer each earning $753,310 in salary and bonuses, the company has disclosed.

Gates, who owns 11.6 percent of the company, and Ballmer each got a base salary of $547,500 and a bonus of $205,810 in fiscal 2002, according to a filing Thursday with the Securities and Exchange Commission.

Ballmer owns 4.4 percent of Microsoft.

But they weren't the highest-paid executives at the company. James Allchin, the platforms group vice president, earned $495,195 in salary and a $400,000 bonus -- the most of any executive still working at Microsoft.

Former President Richard Belluzzo, who left Microsoft earlier this year, earned $918,723 in salary and bonus and $13.7 million in "all other compensation." That reflects the remaining portion of a $15 million advance that Microsoft made to Belluzzo in December 2000 as a guaranteed minimum of what his stock options would be worth as they vested.

Microsoft disclosed that it made a similar arrangement in November 2000 with Richard Emerson, senior vice president of corporate development. The company advanced him $12 million, as part of its efforts to recruit him from the investment-banking field.

Financial arrangements such as these are now illegal under the corporate-reform directives laid out under the 2002 Sarbanes-Oxley Act, and Microsoft "in the future will not enter into these forms of transactions for its executive officers or directors," the filing said.

Compared with executives at other top companies, Gates and Ballmer receive low salaries, said Robert Fong, managing director with Seattle-based executive search firm Leadership Venture Partners.

Five hundred thousand dollars "for an organization like this is nothing," Fong said. But Gates and Ballmer aren't living for their paychecks, he said. "You don't find many execs 20 years after an (initial public offering) of a company still so heavily involved. They're not working for the cash anymore."

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Jeffrey Raikes, group vice president, productivity and business services, earned $745,083, a 7 percent increase over his 2001 compensation. Craig Mundie, senior vice president and chief technical officer, earned the biggest raise, jumping 38 percent to $627,172 from $453,899 the year before.

Microsoft also announced that it would hold its annual meeting for shareholders Nov. 5.